3.4 REMUNERATION REPORT - SBM Offshore · 2018-04-19 · The SBM Offshore Management Board...

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Transcript of 3.4 REMUNERATION REPORT - SBM Offshore · 2018-04-19 · The SBM Offshore Management Board...

  • SBM OFFSHORE ANNUAL REPORT 2017 - 69

    3.4 REMUNERATION REPORT

    This report consists of three parts. The first part 3.4.1,describes the remuneration policy for the ManagementBoard. The second part 3.4.2 provides insight into the

    actual remuneration paid and awarded to theManagement Board members over 2017. Details on thefee structure for the Supervisory Board members are setout in the third part 3.4.3.

    Letter from the Chairman of the Appointment and Remuneration Committee dealing with Remuneration Matters

    Dear Shareholders,

    The year 2017 continued to present significant challenges for the oil and gas services sector due to the low oil price environment.As a result the market environment we face is changing and large investments in the sector remain scarce.

    SBM Offshore has adapted itself to this new environment in order to capitalize on the scarce but increasing opportunities.Through active cost management on one hand and organizational change on the other the Management Board is securing long-term value creation for the Company and its shareholders. Examples of both approaches are the overhead cost reductionprogram and the Fast4WardTM program.

    The Supervisory Board sees the claim of long-term value creation supported by the translation of the Liza FEED contract into anEPC contract by ExxonMobil and the award of the Johan Castberg TMS award in 2017.

    Although our outlook improves, we remain cautious as the market is still uncertain and recovery could be slow. In addition we aremaking progress with our legacy issues, reaching a resolution with the DoJ in 2017, but have not closed this chaptercompletely yet.

    The activities of SBM Offshore are linked to the global oil and gas industry. Consequently, our remuneration policies and practicesmust be competitive with both European and U.S. practices. SBM Offshore aims to remain an attractive employer through allmarket cycles, including the challenges the industry has faced recently and continues to face.

    The SBM Offshore Management Board Remuneration Policy 2015 (’RP 2015’) was approved by the General Meeting ofShareholders on April 17, 2014, became effective as of January 1, 2015 and governs all remuneration elements in 2017.

    The Supervisory Board will propose a new remuneration policy for shareholder approval at the 2018 AGM (April 11, 2018),applicable as of January 1, 2018.

    The Supervisory Board remains committed to relevant and clear remuneration in line with best practices. I look forward todiscussing the remuneration policy, actual remuneration as well as any other questions arising from this report, at the AnnualGeneral Meeting on April 11, 2018.

    Floris DeckersChairman of the Appointment and Remuneration Committee dealing with Remuneration Matters

    3.4.1 MANAGEMENT BOARDREMUNERATION POLICY

    The Supervisory Board aims at remunerating membersof the Management Board for long-term value creation.For this purpose a remuneration policy is in place thatcontributes to a competitive, flexible and predictablyaligned remuneration with the (long-term) performanceof SBM Offshore. The current version of theremuneration policy (called RP201520) has been effectiveas per January 1, 2015, after approval by the AnnualGeneral Meeting.

    In order to support the Supervisory Board in theirresponsibilities an Appointment and RemunerationCommittee (hereafter A&RC) is in place. The A&RCadvises the Supervisory Board regarding remunerationmatters and makes proposals within the framework ofthe remuneration policy. The Remuneration Policy 2015aims at driving the right behavior and consists of four

    20 Further details on these principles and rationale for Remuneration Policy 2015are available for review in the 2014 Annual General Meeting section on SBMOffshore’s website.

    components: (1) Base Salary, (2) Short-Term Incentive, (3)Long-Term Incentive and (4) Pension and benefits.These components are explained hereafter.

    1. BASE SALARYThe Supervisory Board wants base salary levels forManagement Board members to reflect the extent oftheir day-to-day responsibilities and to reward them intheir effort in fulfilling these responsibilities.

    In order to determine a competitive base salary level,the Supervisory Board compares base salary levels ofthe Management Board with relevant companies in theindustry but has also indicated that SBM Offshore doesnot want to be part of the 25% highest rewardingcompanies on base salary in the relevant market. TheSupervisory Board uses the reference group of relevantcompanies in the industry (hereafter the Pay PeerGroup) to determine base salary levels and to monitortotal remuneration levels of the Management Board.Base salaries of the Management Board members andthe Pay Peer Group are reviewed annually.

  • 70 - SBM OFFSHORE ANNUAL REPORT 2017

    Pay Peer Group

    The Pay Peer Group consists of a group of companies that reflect the competitiveenvironment for executive talent in which SBM Offshore operates. The companies in thePay Peer Group are comparable to SBM Offshore in size (revenue and marketcapitalization), industry (global oil and gas services companies) and in terms of complexity,data transparency and geography. The Pay Peer Group may be changed by theSupervisory Board to reflect a change in the business or strategy. Any changes deemed tohave a material impact on remuneration levels will be submitted to the Annual GeneralMeeting for approval. In 2017, the Supervisory Board concluded that no new additions tothe Pay Peer Group were needed for 2017 and a more extensive review of the pay peergroup was already in progress as part of the development of RP2018. 50% of the PeerGroup companies are listed in the U.S. since a dominant part of the offshore oil and gasservices market is concentrated in the U.S.

    Current Pay Peer Group■ Amec Foster ■ Noble Corp.■ Ensco ■ Oceaneering Interntional■ FMC Technologies ■ Petrofac LTD■ Fugro N.V. ■ Petroleum Geo Services■ McDermott International ■ Wood Group PLC

    2. SHORT-TERM INCENTIVEThe Supervisory Board uses the Short-Term Incentive(STI) to reward the Management Board for deliveringthe Company’s short-term objectives, as derived fromthe long-term strategy, for a specific year. The followinggraph shows the maximum STI value that can beattained.

    200%200%

    % o

    f B

    ase

    Sala

    ry

    150%

    100%

    50%

    0%

    150%

    Other MB Members

    CEO

    MAXIMUM STI TO BE ATTAINED

    In order to reach these maximum values, theManagement Board must achieve multiple objectives asdisplayed in the following figure :

    CompanyPerformance Indicators

    Relative weight: 50 - 75%

    Relative weight: 25 - 50 %

    PersonalPerformance Indicators

    Plus or minus 10%

    CSR &Quality Multiplier

    x

    STI

    +1

    2

    3=

    3 GOVERNANCE

  • SBM OFFSHORE ANNUAL REPORT 2017 - 71

    The Company Performance Indicators (1) and PersonalPerformance Indicators (2) together have a relativeweight of 100%. The Corporate Social Responsibility &Quality Multiplier can cause a 10% in- or decrease ofthe total STI value based on safety and qualityperformance in combination with SBM Offshore’s DowJones Sustainability Index score. In case 100% of theCompany and Individual Performance Indicators havebeen realized, the multiplier will not provide anyadditional uplift.

    At the beginning of each year, the Supervisory Board, atthe recommendation of the A&RC, sets theperformance indicators and their respective weighting.The chosen performance indicators are based on theCompany’s operating plan. For each PerformanceIndicator a scenario analysis is performed to determinea threshold, target and maximum level consideringmarket and investor expectations as well as theeconomic environment. The graph hereafter displaysthe actual range application for Performance Indicators.

    Achievement range for Performance Indicators

    200%

    % A

    CH

    IEV

    ED

    OF

    PE

    RFO

    RM

    AN

    CE

    IND

    ICA

    TOR

    150%

    100%

    50%

    40%

    100%

    THRESHOLD TARGET MAXIMUM

    150%

    200%

    0%

    150%

    Other MB Members

    Graph to be updated end of year with latest share price569%

    375%

    PERFORMANCE INDICATORS

    CEO other MB Members

    The details around selected Performance Indicators andtheir weightings are regarded commercially sensitiveand therefore not suitable for predisclosure. However,SBM Offshore does disclose the selected PerformanceIndicators applied over the previous year in theRemuneration Report at the end of each performanceyear. As such, the Performance Indicators applicable in2017 are mentioned in section 3.4.2 of this report.

    At the end of the year, the A&RC reviews theperformance of the Management Board memberscompared on the chosen Performance Indicators andmakes a recommendation to the Supervisory Board todetermine the STI pay-out level. The STI is payable incash after the publication of the annual financial resultsfor the performance year.

    3. LONG-TERM INCENTIVEThe Supervisory Board regards the Long-Term Incentive(LTI) both as a retention instrument and as a reward tothe Management Board for delivering the Company’slong-term objectives over a three year period, asderived from the Company’s strategy.The maximum LTI value is determined by the number ofshares that can be attained by the Management Board.Each year, on a conditional basis, shares of Companystock (so-called restricted share units) are granted toManagement Board members. A share pool of 1% ofthe Company’s share capital (as of year-end prior to theperformance period) is available for share based awardsfor all staff including the Management Board. TheSupervisory Board, upon recommendation of the A&RC,determines the proportion of the share pool that shallbe available to the Management Board. The currentproportion is 20% of which 40% is reserved for the CEOand 20% for each other Management Board Member.The graph hereafter shows the maximum LTI value thatcan be attained.

    0.08%0.08%

    0.1%

    % o

    f Sh

    are

    Cap

    ital

    0.06%

    0.04%

    0.02%

    0.00%

    0.04%Other

    MB Members

    CEO

    MAXIMUM LTI TO BE ATTAINED

    In order to reach these maximum values, theManagement Board needs to achieve multipleobjectives as are displayed in the following figure.

  • 72 - SBM OFFSHORE ANNUAL REPORT 2017

    Directional EPSRelative weight: 0 - 100%

    Relative weight: 0 - 100%

    Relative weight: 0 - 100%Solvency ratio

    Relative TSR

    LTIAt the beginning of each year, the Supervisory Board, atthe recommendation of the A&RC, chooses one ormore of the three performance indicators anddetermines their respective weighting. For eachperformance indicator a scenario analysis is performedto determine threshold, target and maximum levelsconsidering market and investor expectations as well asthe economic environment.

    The following graph displays the actual rangeapplication for the performance indicators. This process(i.e. the linear approach between threshold, target andmaximum) is equal to the STI approach.

    Achievement Range for LTI Performance Indicators

    200%

    % A

    CH

    IEV

    ED

    OF

    PE

    RFO

    RM

    AN

    CE

    IND

    ICA

    TOR

    150%

    100%

    50%

    40%

    100%

    THRESHOLD TARGET MAXIMUM

    150%

    200%

    0%

    150%

    Other MB Members

    Graph to be updated end of year with latest share price569%

    375%

    PERFORMANCE INDICATORS

    CEO other MB Members

    After the end of each year, the Supervisory Board, atrecommendation of the A&RC, assesses the extent towhich the chosen LTI Performance Indicators have beenmet which determines the number of shares that willvest. These shares vest after the Annual GeneralMeeting.

    The vested LTI shares are restricted for an additionaltwo years following the vesting date with the exceptionof those shares that are sold to pay taxes levied on thevalue of the vested LTI shares.

    4. PENSIONThe Management Board members are responsible fortheir own pension arrangements. In order to facilitatethis, they receive a pension allowance equal to 25% oftheir Base Salary. A similar approach also applies toemployees working in the headquarters in theNetherlands. SBM Offshore has chosen not to offer a(global) companywide pension scheme to its employeesdue to the strong international character of theCompany and the fact that pensions are highlyregulated by local legislation.

    OTHER KEY ELEMENTS OF THE MANAGEMENTBOARD REMUNERATION AND EMPLOYMENTAGREEMENTS

    Adjustment of remuneration and clawbackThe service contracts of the Management Boardmembers contain an adjustment clause givingdiscretionary authority to the Supervisory Board toadjust upwards or downwards the payment of anyvariable remuneration component that has beenconditionally awarded, if a lack of adjustment wouldproduce an unfair or unintended result as aconsequence of extraordinary circumstances during theperiod in which the performance criteria have been orshould have been achieved. In addition, a claw-backprovision is included in the service contracts enablingthe Company to recover variable remunerationcomponents on account of incorrect financial data. Theprovisions of the Dutch regulations on the revision andclaw-back of variable remuneration and its provisionsrelated to change of control arrangements apply. Underthe claw-back provisions, STI and LTI awards can beclawed back at the discretion of the Supervisory Board,upon recommendation of the A&RC in the event of amisstatement of the results of the Company or an errorin determining the extent to which performanceindicators were met.

    3 GOVERNANCE

  • SBM OFFSHORE ANNUAL REPORT 2017 - 73

    Severance ArrangementsThe Supervisory Board, upon recommendation of theA&RC will determine the appropriate severancepayment. This will not exceed a sum equivalent to onetimes annual base salary, or if this is manifestlyunreasonable in the case of dismissal during the firstappointment term, two times the annual base salary. Foreach Management Board member, the appropriatelevel of severance payment is assessed in relation toremuneration entitlements in previous roles. As a result,the severance payment in case of termination is setwithin the boundaries of the Dutch CorporateGovernance Code.

    In the case of early retirement, end of contract,disability or death, any unvested LTI shares vest pro-rata, with discretion for the Supervisory Board, toincrease or decrease the final number of LTI sharesvesting up to the maximum opportunity. In the case ofresignation or dismissal, any unvested LTI shares will beforfeited unless the Supervisory Board determinesotherwise.

    Share Ownership RequirementEach Management Board member must build-up aspecific percentage of base salary in share value inSBM Offshore. For the CEO this level is set at anequivalent of 300% of base salary and for the otherManagement Board members, the level is set at 200%.The Management Board must retain vested shares inorder to acquire the determined shareholding level. Anexception is made in case Management Boardmembers wish to sell shares to satisfy tax obligations in

    relation to LTI shares. Unvested shares do not counttowards the requirement.

    LoansSBM Offshore does not provide loans or advances toManagement Board members and does not issueguarantees to the benefit of Management Boardmembers.

    Expenses and AllowancesThe Management Board members are entitled to adefined set of emoluments and benefits. A generalbenefit in this area is the provision of a company carallowance. Other benefits depend on the personalsituation of the relevant Management Board membersand may include medical and life insurance and ahousing allowance.

    3.4.2 MANAGEMENT BOARDREMUNERATION IN 2017

    The actual remuneration for 201721 (see below) is set outhereafter in four sections, namely 1. Base Salary,2. Short-Term Incentive, 3. Long-Term Incentive and4. Pension. After these four sections more insight isprovided into the pay ratio of the Management Boardmembers against the rest of the organization as well assome other important service and remunerationelements.

    21 SBM Offshore pays remuneration and benefits to the Management Boardmembers in euros. For that reason, this report only mentions euros. Furtherinformation regarding the Management Board members’ remuneration canbe found in Note 4.3.6 to the consolidated annual financial statements. In linewith SBM Offshore’s overall financial reporting, the remuneration elementsdescribed there are set out in US$.

    Remuneration of the Management Board by (former) member

    Bruno Chabas Douglas Wood Philippe Barril Erik Lagendijk Peter van Rossum* Total

    in thousands of EUR 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016

    Base salary 747 773 440 110 514 532 382 396 158 537 2,241 2,349

    STI 1,489 708 642 72 803 379 597 282 224 379 3,755 1,820

    LTI 1,665 1,247 709 93 1,004 618 833 447 317 705 4,528 3,109

    Pensions 245 245 110 28 138 138 102 102 66 151 661 664

    Other 284 159 41 8 147 143 37 32 11 264 521 605

    Total Remuneration 4,431 3,132 1,942 310 2,606 1,810 1,951 1,259 776 2,037 11,706 8,547

    in thousands of US$ 5,005 3,467 2,193 343 2,944 2,003 2,204 1,394 877 2,254 13,224 9,461

    * Peter van Rossum retired as Management Board member during the extraordinary meeting of shareholders of November 30,2016 and his contract ended at the Annual General Meeting of April 13, 2017

    1. BASE SALARYThe Supervisory Board decided that Base Salary levelswould not change in 2017 compared to 2016. As suchno indexation or other increases have taken place.

    However the Management Board itself decided totemporarily reduce their Base Salary by 10%considering the difficult market circumstances and thereduction of the Company’s workforce in 2016. This

  • 74 - SBM OFFSHORE ANNUAL REPORT 2017

    decision was for the period of one year (12 month basis)and was implemented per September 2016. As such a(pro rata) decrease in Base Salary figures is visible inthe ’Remuneration of the Management Board by(former) member’ table between 2016 and 2017.On November 30, 2016, Mr. D.H.M. Wood wasappointed as Management Board member and wasdesignated Chief Financial Officer. The voluntary 10%reduction on base salary was not applicable toMr. Wood.

    2. SHORT-TERM INCENTIVEFor 2017 the Supervisory Board decided that theCompany performance indicators outweighed thePersonal performance indicators in terms of importanceto the overall performance.

    The Supervisory Board also decided that the groupbalanced scorecard would represent the Companyperformance indicators. This balanced score cardcontains key objectives as derived from the long-termstrategy and three-year-plan cycle applicablethroughout the organization.

    30% 30% 10% 20% 10%

    70% 30%

    RELATIVE WEIGHT STIPERFORMANCE INDICATORS 2017

    RELATIVE WEIGHT COMPANYPERFORMANCE INDICATORS

    Company performance indicatorsPersonal performance indicators

    The proportional net debt levelOrder intake from the product linesOverhead costsEBITDA of OperationsFollow up level on actions related to the talent review 2016

    RELATIVE WEIGHT COMPANYPERFORMANCE INDICATORS

    The metrics used in the 2017 balanced scorecard were:■ The proportional Net Debt level (weight: 30%);■ Order intake of the Product Lines (weight: 30%);■ Overhead costs (weight: 10%);■ EBITDA of Operations (weight: 20%);■ Follow up level on actions related to the talent review

    2016 (weight: 10%).

    A scenario analysis of the potential outcomes in relationto the STI was done by the A&RC and subsequentlymonitored throughout the year.

    The Personal Performance Indicators for theManagement Board members were related amongstothers to aspects such as succession planning,compliance training and awareness, safety performanceof the fleet and further development of project fundingsolutions.

    With regard to the Company Performance Indicators,the Supervisory Board, at recommendation of theA&RC, assessed the delivered results for eachperformance indicator. They concluded that, asrealization levels per target ranged between 82% andmaximum, the overall score for the companyperformance indicators resulted in 160% for the CEOand 128% for the other Management Board Members.In summary, the Supervisory Board regards theperformance under the Company indicators robust.

    With regard to the Personal Performance Indicators theSupervisory Board, again at recommendation of theA&RC, concluded that the Management Boardmembers dealt with the difficult market circumstancesin a capable manner. This is reflected in a realizationpercentage of 95% for each of the Management Boardmembers on their Personal Performance Indicators.

    As for the CSR & Quality multiplier, the SupervisoryBoard assessed that the delivered performance as awhole is best reflected with a maximum outcome ofplus 10% in the Short-Term Incentive value. The totalperformance resulted in a STI award of 186% of BaseSalary for the CEO and 141%-146% for the otherManagement Board members.

    3. LONG-TERM INCENTIVEWith regard to 2017 three LTI items are of importance,namely: the closing of the performance period andsubsequent vesting of LTI 2015-2017 granted in 2015,

    3 GOVERNANCE

  • SBM OFFSHORE ANNUAL REPORT 2017 - 75

    the grant 2017-2019 and the level of share ownership atthe end of the year.

    LTI grant 2015-2017The 2015-2017 LTI grant contained two types ofPerformance Indicators which are displayed below withtheir relative weighting:

    50% 50%

    RELATIVE WEIGHT LTIPERFORMANCE INDICATORS 2015 - 2017

    Relative TSRDirectional

    Underlying EPS

    With regard to these Performance Indicators, theSupervisory Board, upon the recommendation of theA&RC, assessed the delivered results and hasconcluded that:■ The results related to the Relative TSR were realized

    at maximum as SBM Offshore outperformed therelevant peergroup;

    ■ The results related to the (directional underlying) EPSwere realized at target.

    LTI grant 2017-2019The chosen performance indicators and their relativeweight will be disclosed in the annual report at the endof the three year performance period.

    For the year 2017, the graph ’Maximum LTI Opportunity2017-2019’ displays the conditional (and maximum)share grants that were awarded to the members of theManagement Board for the performance period2017-2019. The number of shares that will actually vestdepend on the actual performance against the settargets but will not exceed the maximum numbersdisplayed below.

    Peter van Rossum

    161,634

    80,817

    80,817

    80,817

    7,857

    Number of shares

    50,000

    100,000

    150,000

    200,000

    Bruno Chabas

    Philippe Barril

    Douglas Wood

    Erik Lagendijk

    MAXIMUM LTI OPPORTUNITY2017 - 2019

    The LTI opportunity of Mr. van Rossum is pro rated dueto his retirement prior to completion of the relevantperformance period.

    Share ownership requirementsAs stated above, each Management Board membermust build-up a certain percentage of base salary inshare value in SBM Offshore. For the CEO this level isset at an equivalent of 300% of base salary and for theother Management Board members, the level is set at200%. The graph below displays the actualshareholdings of the Management Board members perthe end of 2017 in which only common (unconditional)shares are taken into account. Due to their relativerecent appointment Mr. Barril, Mr. Lagendijk andMr. Wood are still in the process of building up theirshare ownership requirement.

  • 76 - SBM OFFSHORE ANNUAL REPORT 2017

    400%600%

    800%

    1,000%

    1,200%

    % of Base Salary

    200%0%

    150%

    Other MB Members

    Graph to be updated end of year with latest share price

    Bruno Chabas

    Value of common shares held

    Share Ownership Requirement

    1,054%

    Douglas Wood

    Philippe Barril

    Erik Lagendijk

    LEVEL OF SHARE OWNERSHIP PER MB MEMBER

    More details on the share-based incentives (e.g. thenumber of conditionally granted and/or vested sharesin the last few years) are provided in the appendix atthe end of this Remuneration Report.

    4. PENSIONSManagement Board members receive a pensionallowance equal to 25% of their base salary for pensionpurposes. Since these payments are not made to aqualifying pension fund, but to the individuals, theManagement Board members are individuallyresponsible for investment of the contribution receivedand SBM Offshore withholds wage tax on theseamounts. In addition to the above a supplementarypension arrangement is in place for the CEO. Thisarrangement is a defined contribution scheme and itscosts are included in the table at the beginning ofsection 3.4.2.

    5. PAY RATIOSIn order to better understand the current internal payrelativities within the organization and to support futuredecisions on remuneration levels the Supervisory Boardreviewed several internal pay-ratios in 2017. TheSupervisory Board decided that the chosen pay-ratioshould be both relevant and reliable. As a result, the

    Supervisory Board, based on the recommendationmade by the A&RC, determined the pay-ratio as thetotal remuneration for each of the Management Boardmembers expressed as a multiple of the average overallemployee benefit expenses (as derived from the tablesin section 4.3.6 from our financial statements). Thefollowing graph displays the pay-ratios of each of the(former) Management Board members over 2017 and2016.

    11

    11

    16

    28

    16

    16

    22

    37

    0 5 10 15 20 25 30 35 40

    Multiple of average employee pay

    Pay ratio 2017 Pay ratio 2016

    DouglasWood

    ErikLagendijk

    PhilippeBarril

    BrunoChabas

    PAY RATIO

    OTHER ELEMENTS OF 2017 MANAGEMENTBOARD REMUNERATION

    AllowancesThe Management Board members received severalallowances in 2017. Most notable is the car allowancewhich is received by all and the housing allowance forMr. Chabas and Mr. Barril. The value of these elementsis displayed in the table ’Remuneration of theManagement Board by (former) member’, at the top ofthis section.

    Retirement of Mr. van RossumMr. van Rossum retired as Management Board memberduring the extraordinary meeting of shareholders ofNovember 30, 2016 and his contract ended at theAnnual General Meeting of April 13, 2017. Noseverance pay was paid to Mr. van Rossum.

    3 GOVERNANCE

  • SBM OFFSHORE ANNUAL REPORT 2017 - 77

    3.4.3 REMUNERATION OF THESUPERVISORY BOARD

    The current remuneration of the Supervisory Board wasset at the Extraordinary General Meetings of July 6,

    2010 and April 15, 2015. In 2017, no changes were madeto the Supervisory Board remuneration policy.

    The fee level and structure for the Supervisory Board is summarized as follows:

    in EUR Fee

    Chairman Supervisory Board 120,000

    Vice-Chairman Supervisory Board 80,000

    Member Supervisory Board 75,000

    Chairman Audit & Finance Committee 10,000

    Member Audit & Finance Committee 8,000

    Chairman Appointment & Remuneration Committee dealing with Appointment Matters 9,000

    Chairman Appointment & Remuneration Committee dealing with Remuneration Matters 9,000

    Member Appointment & Remuneration Committee 8,000

    Chairman Technical & Commercial Committee 10,000

    Member Technical & Commercial Committee 8,000

    Lump sum fee for each intercontinental travel 5,000

    None of the members of the Supervisory Board receiveremuneration that is dependent on the financialperformance of the Company.

    None of the Supervisory Board members has reportedholding shares (or other financial instruments) inSBM Offshore N.V, except for Mr. S. Hepkema. Thereason for his shareholdings is the (share based)remuneration he received as Management Boardmember in the past.

    SBM Offshore does not provide loans or advances toSupervisory Board members and there are no loans oradvances outstanding. SBM Offshore does not issueguarantees to the benefit of Supervisory Boardmembers nor have these been issued.

    The total remuneration of the members of theSupervisory Board in 2017 amounted to EUR 769(2016: EUR 765) thousand on a gross (i.e. before tax)basis. In Note 4.3.6 to the consolidated financialstatements the remuneration of individual Boardmembers is set out.

  • 78 - SBM OFFSHORE ANNUAL REPORT 2017

    APPENDIX ON SHARE-BASED INCENTIVES

    The following table represents the movements during2017 of all unvested shares (the total number of vestedshares held by (former) Management Board membersare reported in Note 4.3.23 to the consolidated financialstatements). Unvested LTI shares in the columns

    Outstanding at the beginning and/or end of the year,are reported at the Target LTI numbers, with the actualvesting hereof in the year shown for the actual numberas per the outcome of the performance criteria as perthe Remuneration Policy. As at December 31, 2017 thefollowing share-based incentives are outstanding:

    Outstandingat the

    beginning of2017 Granted Vested

    Outstandingat the end of

    2017Status at theend of 2017

    Vestingdate

    End ofblocking

    period

    Fair valueof share at

    the grantdate – €

    Fair value ofthe TSR

    component– €

    Bruno Chabas – CEO

    2013 STI Matching Shares 25,171 - 25,171 - vested 11.87

    2014 STI Matching Shares 32,777 - - 32,777 conditional 2018 9.76

    2014 LTI 84,218 - 168,435 - vested 2019 11.79 11.12

    2015 LTI 83,878 - - 83,878 conditional 2018 2020 11.51 14.78

    2016 LTI 84,678 - - 84,678 conditional 2019 2021 11.91 19.92

    2017 LTI - 80,817 - 80,817 conditional 2020 2022 14.31 19.62

    310,722 80,817 193,606 282,150

    Philippe Barril – COO

    Restricted shares1 50,000 - - 50,000 conditional 2018 2020 10.50

    2015 LTI 55,919 - - 55,919 conditional 2018 2020 11.51 11.31

    2016 LTI 56,452 - - 56,452 conditional 2019 2021 11.91 15.50

    2017 LTI - 53,878 - 53,878 conditional 2020 2022 14.31 15.54

    162,371 53,878 - 216,249

    Douglas Wood – CFO

    Restricted shares2 30,000 - - 30,000 conditional 2019 2021 12.71

    2016 LTI 42,339 - - 42,339 conditional 2019 2021 11.91 15.50

    2017 LTI - 53,878 - 53,878 conditional 2020 2022 14.31 15.54

    72,339 53,878 - 126,217

    Erik Lagendijk – CGCO

    2015 LTI 55,919 - - 55,919 conditional 2018 2020 11.51 11.31

    2016 LTI 56,452 - - 56,452 conditional 2019 2021 11.91 15.50

    2017 LTI - 53,878 - 53,878 conditional 2020 2022 14.31 15.54

    112,371 53,878 - 166,249

    Peter van Rossum – formerCFO

    2013 STI Matching Shares 11,896 - 11,896 - vested 11.87

    2014 STI Matching Shares 15,134 - - 15,134 conditional 2018 9.76

    2014 LTI 51,847 - 77,770 - vested 2019 11.79 9.56

    2015 LTI 55,919 - - 55,919 conditional 2018 2020 11.51 11.31

    2016 LTI 56,452 - - 56,452 conditional 2019 2021 11.91 15.50

    2017 LTI - 5,238 - 5,238 conditional 2020 2022 14.31 15.54

    191,248 5,238 89,666 132,743

    Sietze Hepkema – formerCGCO

    2014 LTI 62,111 - 93,166 - vested 11.79 9.56

    62,111 - 93,166 -1 These shares were awarded to Mr. Barril as compensation for the loss of share-based payments at his former employer, and have been reported to the AGM in April

    2015 in Agenda item 11.

    2 These shares were awarded to Mr. Wood as compensation for the loss of variable remuneration entitlements and other benefits in his previous employment, andhave been reported to the EGM on 30 November 2016 in Agenda item 1.

    3 GOVERNANCE

  • SBM OFFSHORE ANNUAL REPORT 2017 - 79

    The following shares (or other financial instruments) are held by SBM Offshore N.V. by members of the Management Board.

    Shares subject toconditional holding

    requirement Other sharesTotal shares at

    31 December 2017Total shares at

    31 December 2016

    Bruno Chabas - CEO 346,260 228,425 574,685 381,079

    Philippe Barril - COO — — — —

    Douglas Wood - CFO — — — —

    Erik Lagendijk - CGCO — — — —

    Total 346,260 228,425 574,685 381,079